Boldly Going Where Accounting and Finance Has Not Gone Before: The Universe of AI

I have been holding off writing this article for a number of reasons. First, the number of Artificial Intelligence (AI) ?tools seems to be growing with each passing day. Even older technologies seem to be adding AI to their names. Second, I have not had the capacity to try to explore the various AI offerings. I have been waiting for the AI explosion to slow down and for me to work with more AI tools. Neither of those things are happening, so I decided now is the time. I need to be honest; I am not an expert in any AI tool. I use several tools daily and am always looking for ways to increase my usage. So, the following article contains my thoughts and opinions – just because I am writing this does not mean I am always right about everything. I am merely trying to share what I believe. If you disagree or have more information, I would love to hear from you. With that said, let’s engage our exploration of The Universe of AI in Accounting & Finance.

Introduction

In early 2023, during a weekly management meeting, one of my business co-founders introduced the rest of us to a cool bit of technology. He prompted the software to write the lyrics to a rock and roll love song in the style of the 80’s hair band. As soon as he hit the start arrow, this weird tool called Chat GPT started spitting out lyrics. All of us were in a state of shock and muttered simultaneously “What is happening?” He then instructed the tool to create an image of a Unicorn standing in a kiddie pool on the Moon. Again, “What is Happening?” Now two years later, AI tools are everywhere, and a large number of people use the technology frequently – it's becoming almost common place.

Personally, I have gone from creating pictures and plays for my grandkids to using it in my professional world. The rapid evolution of AI is transforming the accounting and finance landscape. As AI tools become more sophisticated, business leaders must evaluate their potential impact. This report provides an overview of what AI can and cannot do in accounting and finance, as well as recommendations on leading AI tools that CEOs should consider implementing in their companies.

What AI Can Do in Accounting and Finance

AI has made significant strides in automating and optimizing various financial processes, making accounting more efficient, accurate, and insightful. The following are key areas where AI is currently adding value:

Automate Routine Transactions?AI-powered tools can automate data entry, invoice processing, bank reconciliations, and payroll management, reducing human error and increasing efficiency.

Enhance Financial Analysis and Forecasting?AI-driven predictive analytics can identify trends, forecast cash flows, and optimize budgeting processes with greater accuracy than traditional methods.

Improve Compliance and Fraud Detection?Machine learning algorithms can detect anomalies and flag potential fraud by analyzing large volumes of transactional data.

Accelerate Financial Close Processes?AI automates reconciliation tasks and variance analysis, significantly reducing the time needed for month-end and year-end financial close procedures.

Provide Real-Time Reporting and Insights?AI-powered dashboards generate real-time financial insights, enabling leadership to make faster and more informed decisions.

Optimize Accounts Payable and Receivable?AI can predict late payments, automate invoice approvals, and streamline collections to improve cash flow management.

Enhance Tax Preparation and Strategy?AI-driven tax compliance tools ensure regulatory adherence by identifying deductions, optimizing tax strategies, and simplifying tax filings.

What AI Can't Do (Yet)

Despite its many capabilities, AI is not a perfect solution for every financial challenge. There are still crucial aspects of accounting and finance that require human expertise. AI’s limitations include:

Make High-Level Strategic Decisions?AI can analyze data and provide recommendations, but it lacks the ability to apply human judgment, intuition, and contextual decision-making.

Replace Human Expertise in Complex Scenarios?AI struggles with nuanced financial situations such as negotiations, regulatory interpretations, and crisis management.

Ensure 100% Accuracy Without Human Oversight?AI models rely on historical data, which may contain biases or errors that need human validation and adjustments.

Adapt to Rapidly Changing Business Environments?AI requires continuous training and updates to remain effective in dynamic industries where regulations, economic conditions, and business models frequently change.

Maintain Ethical and Compliance Standards Independently?AI can assist with compliance but requires human oversight to ensure adherence to industry regulations and ethical considerations.

Examples of AI Working in Accounting and Finance

So by now you might be thinking, this is all great but I need to see the tools for myself. I totally understand. What follows are areas of finance and accounting and an example of a few AI tools that may provide the help you are looking for. The list is not an exhaustive one - more of a sampler showing some of the most effective AI-driven solutions available today:

Automation & Bookkeeping

• Xero with AI:?Automates bookkeeping tasks and categorizes transactions using machine learning.
• QuickBooks AI:?Provides predictive insights, automated invoicing, and cash flow forecasting.

Financial Planning & Analysis (FP&A)

• Datarails:?AI-driven FP&A tool that enhances budgeting, forecasting, and scenario planning.
• Cube:?Automates financial modeling and real-time reporting.

Fraud Detection & Compliance

• Fyle:?AI-powered expense management with fraud detection and compliance checks.
• ThetaRay:?Uses AI to identify anomalies in financial transactions for fraud prevention.

Accounts Payable & Receivable

• Tipalti:?Automates accounts payable, invoice processing, and global payments.
• Bill.com:?AI-driven automation for bill payments and receivables.

AI-Powered Tax Compliance

• Avalara:?Automates sales tax calculations and filing.
• Vertex:?AI-enhanced tax compliance and reporting.

Financial Reporting & Business Intelligence

• Domo:?AI-driven analytics and reporting for finance teams.
• Sisense:?Provides AI-powered financial data visualization and trend analysis.

So, enough of my thoughts, what do others say? Here are some insights from industry leaders and research reports:

• KPMG Global AI in Finance Report:?"71% of companies surveyed are using AI within finance operations, 41% of them to a moderate or large degree."
• Statista:?"In 2023, the financial services industry invested an estimated 35 billion U.S. dollars in AI, with banking leading the charge, accounting for approximately 21 billion U.S. dollars."
• KPMG Survey:?"62% of US companies using AI to a moderate or large degree, 58% piloting or deploying generative AI (GenAI) and 52% using AI specifically in financial reporting."
• Satya Nadella, CEO of Microsoft:?"AI is the defining technology of our times. It’s augmenting human ingenuity and helping us solve some of society’s most pressing challenges."
• Jensen Huang, CEO of NVIDIA:?"AI will change the way we work and run our businesses in the same way that the introduction of the internet did. AI decision-making in particular has the potential to raise global economic output and is projected to add a staggering USD 13 trillion to the global economy by 2030."

Wrap Up

As we boldly go where accounting has not gone before, AI stands ready to be our trusted teammate. Incorporating AI into our accounting and finance departments, we may be able to achieve stellar efficiency, accuracy, and decision-making capabilities. However, remember that AI is here to enhance, not replace (at least not in the near future), the invaluable expertise and judgment we have as humans. Ignoring AI is not a wise option. All around us, people, companies and even governments will be utilizing AI to move to the next level. Those who ignore it will be left behind.

We need to stay curious and to keep exploring. We need to be open to new ways of doing work, but we need to verify the real impact for ourselves. Engage with AI, and live long and prosper in the worlds of accounting and finance.

Stay Ahead of the Curve: Follow These Minds

Articles Worth Reading :

PWC - "How AI Will Transform the CFO Role" - https://www.pwc.com/gx/en/issues/artificial-intelligence/cfo-artificial-intelligence.html

Forbes - "The Dawn Of A New Era: AI's Revolutionary Role In Accounting" https://www.forbes.com/sites/neilsahota/2024/04/22/the-dawn-of-a-new-era-ais-revolutionary-role-in-accounting/

Journal of Accountancy - "More organizations are turning to AI in the finance function" https://www.journalofaccountancy.com/news/2024/sep/organizations-turning-to-ai-in-finance-function.html

Cool Technology to Check Out:

Clickup - "10 Best AI Tools for Accounting & Finance in 2025" https://clickup.com/blog/ai-tools-for-accounting/

Devi - "Best 5 AI Bookkeeping Tools for 2025". ddevi.com/en/blog/best-5-ai-bookkeeping-tools-for-2025